Net mortgage approvals for house purchases decreased by 300 to 66,200 in January, compared to an increase of 400 in December, according to the latest money and credit statistics released by the Bank of England.
The data also shows that net borrowing of mortgage debt by individuals rose by £0.9bn to £4.2bn in the first month of 2025, compared with an increase of £1.1bn in December, while approvals for remortgaging increased by 2,200 to 32,900 after falling for the previous two months.
The annual growth rate for net mortgage lending rose to 1.8% in January from 1.5% in December, continuing the upward trend observed since April 2024. Gross lending was little changed in January at £21.3bn, while gross repayments decreased to £16.3bn, from £18.5bn in December.
Industry reaction
Nathan Emerson, CEO of Propertymark, commented: “With widespread economic forces impacting the housing market in several ways, we continue to see the likes of inflation and a generally elevated base rates still proving unsettling for some consumers.
“Overall, the housing market is showing an immense degree of resilience, with recent data from our member agents illustrating an almost 40% increase in sales agreed when compared to the same period only 12 months earlier.
“When conditions permit, it would remain welcome news to see the Bank of England have the confidence to further reduce base rates and for lenders to introduce additional products built on more competitive rates.”
Simon Gammon, managing partner at Knight Frank Finance, said: “The mortgage market remained busy in January, largely due to first-time buyers squeezing deals through ahead of the changes to stamp duty and needs-based buyers that had put off acting during the volatility of 2024.
“The year began with more turbulence in bond markets. However, mortgage rates have since eased on signs that the medium-term outlook for inflation looks fairly positive. That gave lenders the confidence to bring two and five year fixed rate deals below 4% this month.
“The short-term outlook is a different matter altogether. Inflation is likely to spike in Q3 and, though Bank of England policymakers are convinced it will be a temporary bump, it may exert some upwards pressure on mortgage rates. Borrowers can expect another year of alarming headlines, with mortgage rates ebbing and flowing around this level until we get a more positive shift in the outlook.”
Rosie Hooper, chartered financial planner at Quilter Cheviot, added: “January’s money and credit data from the Bank of England points to a property market still in a holding pattern, with no dramatic shifts. While demand is not collapsing, it remains constrained by affordability pressures and cautious sentiment. Remortgaging approvals picked up modestly after two months of declines, likely driven by borrowers looking to lock in deals amid uncertainty over when rate cuts might materialise.
“Overall, today’s figures reinforce the idea that while the housing market is not in freefall, it remains sluggish, with borrowers constrained by affordability pressures. With the road ahead for rate cuts still not completely clear, the coming months will be key in determining whether borrowing and spending activity start to accelerate more meaningfully.”
Read the orginal article: https://propertyindustryeye.com/industry-reacts-to-latest-bank-of-england-mortgage-data/
